types_of_businessesfandomcom-20200215-history
Group 5
Write the first paragraph of your page here. 'Service Business' ''- Matthew Collins'' A Service Business is a commercial enterprise that provides work by an individual or team for the benefit of its customers. A service business typically provides intangible products, such as accounting, banking, consulting, cleaning, education, and transportation services. Service businesses may also sell tangible goods on the side, but are classified as service businesses due to their service oriented resource allocation (e.g. a hairdressing salon that also cells specialized hair products on the side). One goal of a service business is to provide a utility to its customers, however the main objective of this type of business is to generate a profit. It is estimated that the service industry provides over 80% of all global jobs. There are two major sectors in the economy. One is the goods-producing sector, and the other is the service-producing sector. A Service Business is categorized within the service producing sector (See #6 on list). The service-producing sector includes the following divisions: # Transportation, Communications, and Utilities # Wholesale trade # Retail Trade # Finance, Insurance, and Real Estate # Public Administration # Service The services division activities can be described further by their economic activities as physical, intellectual, aesthetic, or recreational. Physical activities involve working with objects; examples include repairing cars, landscaping, cutting hair, or preparing a meal. Intellectual activities involve providing education or training, such as at a university or trade school. The aesthetic activities entail providing consumers with artistic or visual experiences; museums, theater performances, art shows, and musical performances are examples. Finally, other experiential activities involve providing customers with recreation, such as in amusement and theme parks, zoos, or campgrounds. One topic that is becoming increasingly important to the services division of the economy is offshoring. Offshoring occurs when jobs and production are relocated to a foreign country to maximize efficiency and/or to minimize production costs and employment payrolls. Offshoring must not be confused with outsourcing, which occurs when a company contracts with another company to perform part of their work, but does not necessarily shift the work to a foreign country. 'Merchandising Business' -''MinhaIl Shen'' A merchandising company buys goods and resells said goods at a higher price than purchased. There are two main types of merchandising companies - retail and wholesale. The most well-known type of merchandising businesses is retail. In short, retail companies sells products directly to customers. Examples of retail companies are Walmart, Target, and The Gap. On the other hand, wholesale companies are those who buy items in bulk and sells them to other retailers or wholesale companies. There are not many notable wholesale companies, but an example would be a business that buys phones and distributes it to other businesses for a higher price. Although Costco is known as a wholesale company, it has become more of a retail since it distributes its goods directly to consumers. Although merchandising companies are expected to make a lot of capital, as they resell products at a much higher price, many factors hinder their profit. For example, these companies must pay their employees. They must also pay for transportation of their goods, and lots of other factors that go into making and delivering their products. Generally, merchandising companies rely on their employees to make profit as opposed to machinery and volunteers that are used by manufacturing and non-profit companies. Because merchandising companies have so many costs to cover, their employees may not be paid well. If they raise the wage of their employees, then they must also increase the costs of their products, which means less customers will be inclined to come to their stores and buy their products. Merchandising businesses buy their products from manufacturing businesses (see below). In essence, manufacturing businesses create goods from raw materials (wood, minerals, etc.). Merchandising companies will buy their products from manufacturing businesses by bulk based on their demand, and will resell their products at a higher price. The action of reselling the product is their sole source of income, and therefore must cover the costs mentioned above in order to achieve profit. The most popular merchandising store is the American retailer, Walmart. Walmart is considered a superstore that sells various things such as fresh produce, food products, sporting goods, electronics, etc. Because of their relatively low prices and variety of products, Walmart attracts many customers and from this became the highest grossing merchandising company in the world. 'Manufacturing Business' ''-Nicholas Chivaran'' A manufacturing business works with the conversion of raw materials into finished goods that are sold to, customers for a profit based on their demands, expectations,and specifications. Traditionally, these type of businesses work with both man-power and machines in a combination that produces on a large scale. Examples of this type of business include technology giants such as IBM, Samsung, and General Electric all providing electronic goods for their consumers or more traditional, mechanical manufacturers such as Volkswagen, Ford, and Nissan. Manufacturing companies, however, do not necessarily run their operations in their domestic countries but rather run them in areas where employees can work for less wage. A prime example of this would be companies such as Apple, designing their products in Silicon valley, but actually producing them in Mongolia, China, Korea, and Taiwan. ' '''Under manufacturing businesses there are three subsets of manufacturing production made-to-stock, made-to-order, and made-to-assemble. Made-to-stock, or MTS for short, is the most traditional of the three subsets where the manufacturing is based on supply and demand forecasts. For example, if Apple’s new iPhone sold-out in the past releases within the first week, of course they are going to to produce more these phones; however, if their new Macbooks only sold half of its stock in the first 3 months of release then there will be less production of the product. MTS is heavily dependable on these forecasts and from this there is a chance for either over-stocking or under-stocking product. Secondly there is made-to-order, MTO for short, where the manufacturing of the product is based from a customers specific purchase order. Generally, this type of production involves the harvesting of the raw materials and creation of the customer order, in effect, causing the production time and customer wait time longer. Thirdly and finally, is made-to-assemble, MTA for short, which is a hybrid of MTS and MTO. This type of production involves the manufacturing of basic parts for a more complex product, which is based on forecasts. Products are sold based on customer order and the basic parts can then be assembled; however, if there are limited orders then they are left with the parts. Regardless of the manufacturing method, manufacturing businesses must pay Corporate income taxes in Canada;however, they can benefit from Manufacturing and Processing Tax Credit. The credit states that : “Corporations involved in manufacturing and processing, fishing, farming, mining and logging can qualify for a tax credit that reduces the corporate income tax rate to 10 per cent.” 'Non-Profit Organization''' ''-Chamod Gamage'' A non-profit organization is an organization which uses the surpluses of its revenues (after covering costs) to further an ultimate objective that furthers a variety of causes or purposes; it must serve the public. These can include religious, scientific, literary, educational, of public safety causes and purposes. There are many different examples of non-profit organizations: universities like the University of Western Ontario, charities like World Vision Canada, healthcare organizations like Canadian Blood Services, as well as charities like the Mississauga Food Bank. Non-profit businesses have several defining characteristics which separate them from the for-profit business types outlined above. Firstly, non-profit businesses, as stated before, must exist solely to generate money for a cause that benefits the public in some way. Secondly, individuals do not have shares or interest in these non-profit organizations or its properties. Thirdly, non-profit businesses must recycle the majority of their profits back into the business to further advance their ultimate objective. Fourthly, as a result, owners may not collect any of the profit made by the business; rather, they are paid wages just like those who work for the business. Finally, these non-profit businesses are held to a much higher degree of accountability than their for-profit counterparts; their tax returns and budgets are often made public in order to maintain the trust of those who provide the business with financial capital. Non-profit businesses can be divided into multiple subsets. These include charities, private voluntary organizations (PVOs), civil society organizations (CSOs), and non-governmental organizations (NGOs). All these organizations have one thing in common, however, as they all share the common objective of benefiting the public. These organizations must have paid workers in addition to volunteers. These paid workers may be paid less than their counterparts in for-profit businesses. However, the people in leadership positions in these organizations often make as much or even more than their counterparts in for-profit businesses. Thus, only the profits of the business go towards their ultimate objective. For this reason, they are exempt from income tax, sales taxes, and property taxes in both Canada and the United States. Volunteers are those who provide labour for the company but do not gain financial capital in return; only working experience for the specific company. A prominent example of a non-profit business found in Canada is the Peel District School Board. The purpose of this organization is obviously to provide education at the elementary, middle, and secondary school level, mainly to school-age children, but also adults. While the government of Ontario does provide over $1.5 billion to the Peel District School Board, almost all of this money goes toward paying for the wages and pensions of its workers (teachers, administrators, janitors, etc.), running the expenses of its school buildings, as well as numerous other minor expenses. Any surpluses are then simply reinvested in the organization in order to improve the quality of education. Thus, the Peel District School Board is a non-profit organization--one that has a very strong influence over the lives of over 150 000 students, including the writers of this page.